WesBanco's Q1 2025: Navigating Contradictions in Deposit Growth, Loan Expectations, and Credit Quality

Deposit cost reduction, loan growth expectations, CRE concentration management, credit quality and charge-offs are the key contradictions discussed in WesBanco's latest 2025Q1 earnings call.



Successful Acquisition and Financial Performance:
- WesBanco, Inc. reported net income, excluding merger and restructuring expenses and the day one provision on acquired loans, of $51.2 million and earnings per share of $0.66, representing an 18% increase year-over-year despite significantly higher shares outstanding from the PFC acquisition.
- The company's successful acquisition of Premier Financial expanded its asset size into the top 100 U.S. banks, which included a continued strong performance with improved net interest margin and efficiency ratio.

Strong Organic Growth and Deposit Funding:
- WesBanco reported total deposits organically increased by $922 million year-over-year and $285 million quarter-over-quarter, driven by deposit categories other than certificates of deposit, with annualized growth of 11% quarter-over-quarter.
- This growth was fully funded by total organic loan growth, indicating stable deposit funding to support loan expansion.

Net Interest Margin Enhancement:
- WesBanco's net interest margin improved to 3.35%, reflecting a 43 basis points increase year-over-year and 32 basis points improvement compared to the fourth quarter.
- This improvement was driven by higher loan and securities yields, lower funding costs, and purchase accounting accretion.

Credit Quality and Risk Management:
- WesBanco's credit quality remained stable with low key metrics and a coverage ratio of 1.25%, despite the integration of Premier loans.
- The company has limited exposure to the Washington D.C. market and diversified loan portfolio across nine states, mitigating risks from potential regional disruptions.